- The central bank of India offers clarity on the regulations of cryptocurrency in India, saying that Bitcoin and other cryptocurrencies are not banned altogether but their dealings in banks and other financial institutions are.
The Reserve Bank of India has, after much ambiguity, provided clarity on the status of crypto regulations in India, in particular, its decision to ban trading in crypto but denying an overall ban on crypto.
The previous year saw a lot of uncertainty with regard to the regulations imposed on crypto. A petition was filed by the Internet and Mobile Association of India (AIMAI) challenging the central bank’s decision. The investment and crypto community also did everything it could to get some respite.
On Monday, however, RBI in response to the petition said that Bitcoin and other cryptocurrencies are not banned but their dealings in banks and other financial institutions are. The reason for this is to prevent money laundering, financing of terrorist activities and other illicit activities. The 30-page long affidavit read as reported by Economic Times:
“The RBI has been able to ring-fence the entities regulated by it from being involved in activities that pose reputational and financial risks along with other legal and operational risks.”
That being said, RBI affirmed India’s role in promoting and incentivizing blockchain-based initiatives. The RBI said that it does not stand in the way of technological innovations and emergent technologies from paving their way into the economy.
This news will come off as a relief to investors and entrepreneurs in India, especially following the Finance Minister of India’s statement in 2018 saying that crypto is neither prohibited nor legalized.
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